Foreign bank account to 'hold' poker winnings?

lippy · #1 10-26-2007, 12:16 PM

With the current state of online poker, I don't want to keep much money in my online account... just enough to play with.

However, I don't like cashing it out all the time and subsequently having to pay taxes on it and creating a giant paper trail.

Would it be possible to send my winnings to say, a Canadian or UK to hold my funds. Then, as I need them, transfer them to a US bank account.

Would this be illegal? Could this be used to not pay taxes (not my intent, worried it would look like my intent)? Is there anywhere on a tax form I'd have to declare foreign assets or something like that?

I'm in a weird tax situation as I will earn no income next year aside from poker but have earned a fair amount from jobs and an inheritance this year. I also have a decent chance of getting audited and haven't kept the best of records of my losses for this year.

Thanks.

Skallagrim · #2 10-26-2007, 12:46 PM

Hire a good accountant and follow the advice; you are obviously too lazy to do the research needed to answer your questions on your own (all of which have been asked and answered in these forums before). Sorry to be hard on you, but you appear to be a walking advertisement for how NOT to become a poker pro.

Skallagrim

DeadMoneyDad · #3 10-26-2007, 01:36 PM

[ QUOTE ]
With the current state of online poker, I don't want to keep much money in my online account... just enough to play with.

However, I don't like cashing it out all the time and subsequently having to pay taxes on it and creating a giant paper trail.

Would it be possible to send my winnings to say, a Canadian or UK to hold my funds. Then, as I need them, transfer them to a US bank account.

Would this be illegal? Could this be used to not pay taxes (not my intent, worried it would look like my intent)? Is there anywhere on a tax form I'd have to declare foreign assets or something like that?

I'm in a weird tax situation as I will earn no income next year aside from poker but have earned a fair amount from jobs and an inheritance this year. I also have a decent chance of getting audited and haven't kept the best of records of my losses for this year.

Thanks.

[/ QUOTE ]

Depending on the size of your inheritance and your position, executor for example, will determine to some degree who much exposure you might face.

Remember you have no idea who I am nor I you.

With the IRS they seize first then you have to prove you innoence, not the other way around. So intent in tax matters carries more import than in other activities.

Consult and CPA and a lawyer. Depending on the size of your poker accounts and the complexity of your existing tax exposure you may want to pay for quality.

I am not soliciting business for anyone but I can point you to some of the better people in the field. But they aren't chaep.

D$D

GittyUP · #4 10-26-2007, 03:04 PM

[ QUOTE ]
Would this be illegal? Could this be used to not pay taxes (not my intent, worried it would look like my intent)? Is there anywhere on a tax form I'd have to declare foreign assets or something like that?

[/ QUOTE ]

I don't know a lot about the issue but I do know this. You are required to declare any income for the year whether or not you made the money in another country. Bringing the money back in would raise the same questions as directly depositing it in your account now.

Now keeping the money in a foreign institution that allows you to have an ATM card or foreign credit card would be a good way around this. You could just get money out of ATM on a small scale as cash and never have it enter the US financial system. A lot of people did this with neteller and Im sure you know how that ended up. Again though this would be highly illegal form of tax evasion even though very hard to detect.

Kurn, son of Mogh · #5 10-26-2007, 03:10 PM

However, I don't like cashing it out all the time and subsequently having to pay taxes on it and creating a giant paper trail.

You're required to pay taxes on your winnings when you file for the year you won the money. When you cash out (if ever) is irrelevant.

Would it be possible to send my winnings to say, a Canadian or UK to hold my funds. Then, as I need them, transfer them to a US bank account.

As long as you accurately report your income, no problem. If you do not report the income and get caught, you are guilty of structuring, which is worse than simple tax evasion.

Besides, if you keep more than $10k in a foreign bank account at anytime during the year, you are required to report that any way.

I also have a decent chance of getting audited and haven't kept the best of records of my losses for this year.

Get an accountant and at least try to reconstruct a reasonable facsimilie of your sessions during the year.

lippy · #6 10-27-2007, 04:12 PM

Thanks for the responses.

Skallagrim,

I looked through the FAQ and did a fair amount of searching through here and Google. Found nothing relevant.

DeadMoneyDad · #7 10-27-2007, 07:05 PM

[ QUOTE ]
Thanks for the responses.

Skallagrim,

I looked through the FAQ and did a fair amount of searching through here and Google. Found nothing relevant.

[/ QUOTE ]

Try: IRS Web Site

D$D

Mr Sarcastic · #8 10-28-2007, 07:16 PM

D$D,

What is the matter ? Can't you read ? He already SAID he googled this tax issue and found nothing relevant. Obviously, he already knew that the IRS had a website.

Come on, the guy wants to play poker for a living, not read confusing tax documents or hire professional advisors, like the ones handling his inheritance.

Stop tapping on the glass, let him swim on unmolested to poker SuperStardom. I have a feeling he will not have to worry much about paying taxes on his future winnings.

DeadMoneyDad · #9 10-29-2007, 06:42 AM

[ QUOTE ]
D$D,

What is the matter ? Can't you read ? He already SAID he googled this tax issue and found nothing relevant. Obviously, he already knew that the IRS had a website.

Come on, the guy wants to play poker for a living, not read confusing tax documents or hire professional advisors, like the ones handling his inheritance.

Stop tapping on the glass, let him swim on unmolested to poker SuperStardom. I have a feeling he will not have to worry much about paying taxes on his future winnings.

[/ QUOTE ]

The link was really to the actually 99-22.1 form in pdf....

D$D

Skallagrim · #10 10-29-2007, 08:57 AM

[ QUOTE ]
Thanks for the responses.

Skallagrim,

I looked through the FAQ and did a fair amount of searching through here and Google. Found nothing relevant.

[/ QUOTE ]

I am being leveled here right?

Not 3 weeks ago we engaged in a lengthy discussion of foreign bank accounts and the reporting requirements. There is a master sticky for tax questions somewhere on this site. Tax questions are common here and in other forums. The poker magazines have all published articles on basic tax questions for poker players.

And it really does not matter, your situation requires a professional to judge your specific circumstances. This forum is a good place for getting general knowledge, but its a fool who relies on internet advice for his personal circumstances, especially if there is any real money at stake. Hire the accountant.

Skallagrim